Sharp gets desperately needed $120M investment from Qualcomm

Sharp, the longstanding Japanese TV and monitor maker, has just gotten a lifeline from Qualcomm. It's a big one—to the tune of over $120 million—around a 2.6 percent investment in the company.

Last month, as we reported, the company sustained a ¥249.1 billion ($3.12 billion) loss for its latest quarter, the second year it had suffered record deficits. The company still holds about $10 billion of debt.

But now, the San Diego-based firm, through its Pixtronix subsidiary, will work with Sharp to develop new power-saving screens. According to the Wall Street Journal, Qualcomm’s tech (known as microelectromechanical systems or MEMS), when combined with Sharp’s indium gallium zinc oxide (IGZO) tech, could be a big improvement over the traditional silicon-based screens. The result will be much lower power demands, as well as increased resolution and sensitivity.

However, analysts seem to suggest this is too little, too late.

“This investment is good news for Sharp,” Hideki Yasuda, an analyst at Ace Securities Co. in Tokyo, told Bloomberg. “However, it won’t have sufficient impact to improve the company’s situation dramatically. It’s only symbolic.”

Mitsushige Akino, a Tokyo-based chief fund officer at Ichiyoshi Asset Management Co., also told Bloomberg that Sharp needs much more cash before it can adequately compete.

“Even if 10 companies invested 10 billion yen each in Sharp, it would still only be 100 billion yen. It’s meaningless.”

The Wall Street Journal also cited unnamed sources who said Intel and Dell may be eyeing a stake as well.

Promoted Comments

When you've already lost $10 billion, $120 million might as well be nothing. Let's say you have a $250,000 mortgage. If Qualcomm decided to 'help' you, you would get $3,000. That might help you make your next 2 or 3 mortgage payments, but next quarter, you would be in the same position again.